Deutsche Bank Research analysts have studied over three hundred fiat currency-linked assets that have appeared since 1800, for more than two centuries. And we found out that 49% of such assets failed. The bank's experts call management issues and the macroeconomic vulnerability of stablecoins the main factors of failures.
"History says that stablecoins can face turbulence. While some are able to survive eating, most are likely to fail due to a lack of transparency in operations and vulnerability to speculative sentiment."
Deutsche Bank Research experts recalled that in 2022, the Terra USD (UST) stablecoin and the associated LUNA asset collapsed on the market. As a result, investors lost $40 billion. In the spring of 2023, Circle's USDC lost its peg to the US dollar as a result of the bankruptcy of the American Silicon Valley Bank.
An analyst at a German bank believes that such incidents highlight the risks of stablecoins and cast doubt on the future of this asset. According to the results of a survey of 3,350 customers, 42% of respondents expect the complete disappearance of stablecoins. Only 18% of the participants believe in prosperity.
According to Deutsche Bank experts, the similarity of these assets allows us to extrapolate historical data on linked currencies to non-algorithmic stablecoins. The bank's experts even expressed doubts about the stability of Tether's USDT, since the sufficiency of the stablecoin provision is not entirely transparent.
Tether has already reacted by announcing that the bankers' report "lacks clarity, substantial evidence, and relies on vague statements rather than rigorous scientific analysis" and snapping:
"Deutsche Bank's history of fines and sanctions raises doubts about its ability to criticize other representatives of the financial industry. The International Monetary Fund has called the institution the riskiest bank in the world."
Earlier, Deutsche Bank experts said that for some time after bitcoin halving, flat dominance should be expected in the market, that is, the state of the asset when its price does not rise or fall for some time.